When you think MAXIMIZE, what do you think? Increase right? Well in this instance I am not talking about INCREASING your income, necessarily, but I am talking about increasing the money that you hold on to and the money that you can eventually save. When I am referring to maximize, I mean using what you get to the fullest extent.
Are you tired of having more month than money? Well I know I was, so I made some serious changes to the way I handled my money to get the best out of every single dollar, to maximize my income. I found myself going to my favorite coffee shop every single day for my large coffee to get my day started. Until one day it hit me, you are spending way too much on this coffee every month. I was spending at least $80 a month on coffee at the coffee shop. And, to you that might not seem like a lot, but $80 x 12 = $960 a year. This could boost your savings tremendously.
So, I made a change, I bought a coffee maker, started purchasing bags of ground coffee from the coffee shop, and made my own coffee at home every morning. I saved myself $40 a month. That means that I was able to either allocate that $40 to something else, a bill, or any other expense, or I was able to save that $40 in a Money Market account. I maximized my income and you can too with these 3 easy steps…
First things first, you need a BUDGET, yes budget, down to the last dollar. A budget will keep you on track and give you full control of your spending. Budgeting will help you get to know your money very well. You can watch this video to help you set up your budget today in 10 easy steps.
Next, to set up your budget, it is a great idea to track your spending for at least two months. This will give you a clear view of what you should reduce or eliminate. Using a tool like Rocket Money or your bank app can help you see everything that you spend. You can download the app onto your phone or access it on-line on your computer. BUT, if you are more into seeing things on paper, like me, I suggest that you use this expense tracking sheet, three different colored pens (like black, blue, and red), a pencil, and a highlighter. Write down every single thing that you spend your money on and color code each expense. Use black for expenses that are the same every month, like rent and your car payment, blue for expenses that change each month, like your electric bill or grocery bill, and red for unnecessary expenses, like the cost of the movies or a jewelry purchase. Use a pencil to write in your expected amount and make it permanent with the pen. If you find yourself spending more than your estimation, highlight those expenses. This will give you a clear view of what you should reduce or eliminate.
Last, but not least, as you go through your expenses, see what little tweaks you can make to your spending, such as:
- Making Coffee or Tea at Home POTENTIAL SAVINGS $40/month
- Doing your nails or hair yourself at Home POTENTIAL SAVINGS $180/month
- Getting rid of Netflix and Hulu, do you really need both? POTENTIAL SAVINGS $15/month
- Do you use that gym that you are paying for every month? POTENTIAL SAVINGS $40/month
- Buying regular gas instead of premium gas because, contrary to popular belief, they are actually similar POTENTIAL SAVINGS $80/month
Once you make these little changes, over time, you should see great progress and have more money at the end of the month. If you make any of these changes, email me at contact@thefinancialspotlight.com and let me know what changes you have made and how they have benefited you financially.